Alibaba Group Holding Ltd, Chinese multinational company, is expected to secure complete access of the online food delivery app, Ele.me for an estimated value of $9.5 billion.
Initially Alibaba and affiliate Ant Small and Micro Financial Services Group were owners of about 43% shares of the food chain app. However, as per the latest reports, the Chinese e-commerce giant has acquired the remaining shares of Ele.me which were previously owned by Baidu.
Wang Lei has been appointed as the CEO of Ele.me wheareas Mark Zhang will become its chairman. Special advisor to Alibaba Group CEO Daniel Zhang has been entrusted with the position of planning new retail strategies.
Zhang, CEO of Alibaba Group issued a statement, “Under the leadership of its founder and management team, Ele.me has achieved leading market share in China’s online food delivery and local services sector. Our shared belief that New Retail will create more value for customers and merchants has brought us together. Looking forward, Ele.me can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail initiative.”
Ele.me, meaning, “Are you hungry?” operates in 2,000 Chinese cities with a customer base of around 260 million users as of mid-2017. The online food delivery company had employed three million scooter-borne delivery drivers in order to reach its customers. This latest strategic move will damper the food delivery market for its rival Tencent.
The Chinese megaseller company while commenting on the acquisition said, “By combining Ele.me’s online home delivery services with Koubei’s consumer acquisition and engagement capability for a range of restaurants and service establishments, Alibaba will be able to offer an integrated experiences to customers both online and offline.”